To be confused by 'high earners' complaining about taxes?

[tutuland]

So high earners pay lots of tax. The top 20% pay for 70% or whatever the numbers are.

But (beyond printing more money) isn't the money there high income people make just coming from the paying public? No matter who you work for, your company's profit is just an accumulation of normal people paying for things.

So ultimately, isn't it all our money anyway? Just beacuse the game is rigged and you get paid 400K for management whatever, it doesn't mean you're more deserving of that money than anyone.

Why are you being such an absolute gobshite to everyone?

Personally I’m very happy to be one of those higher earners. @tutuland
Every rainy Monday morning, or each panic attack that I pop a beta blocker in my mouth for is so worth it. When I dropped my nine month old baby off at nursery.. to pay extortionate fees and barely make my petrol money back to keep my career going..
All of this makes me so happy to pay for lazy fat arseholes that do nothing.

Some people are in genuine need- I don’t begrudge that. But a lot aren’t and frankly it’s sickening. This attitude that you should be housed and fed whilst contributing nothing to society.

From Wikipedia: A flat tax (short for flat-rate tax) is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base.

The Gulf States and Singapore have significant sovereign wealth, but mostly the answer is that there is taxation, it’s just flatter, and welfare is more restrictive and means tested; plus there are significant co-pay and required national saving programs. The UK is also a potentially rich nation, but we have a relatively moribund GDP growth. People think we have a welfare budget issue but actually whatever £ amount we spend, it’s remained roughly 10-11% of GDP over the last decade. Our problem is that GDP isn’t growing enough. We need to address that and recreate a growth economy.

I think the answer is in your question. They couldn’t even be bothered to research the facts in the post they started this thread with (fyi, the top 10% of income taxpayers pay 60% of all income tax while earning ~35% of total income; the top 1% pay 28% of tax on 13% of income).

They seem to think the economy is a zero sum game, conflating money circulation with value creation, ignore high earners’ outsized contributions, and dismisses market rewards for skill and risk as “rigged” without evidence.

High earners’ pay reflects genuine productivity that grows the economy, not zero-sum extraction from the public. But @tutuland has no real idea how the economy works or where the real systemic unfairness is.

That wouldn't work in the UK. Lots of people simply wouldn't be able to afford a higher rate of tax. Wages are low relative to the cost of living.

The UK is not a potentially rich nation anymore. It has large fiscal and trade deficits and little in the way of natural resources. Most UK infrastructure and companies are now owned by foreigners so revenue flows out of the country. You can state that the problem is a lack of GDP growth (in your opionion) but the secret sauce of how to increase that has evaded successive governments for many, many years.
Higher earners are not necessarily more productive nor more vital than lower earners and lowering taxes radically on the better off is not the secret sauce, although Liz Truss fans tend to think so!

Most UK infrastructure and companies are now owned by foreigners so revenue flows out of the country.

This is one of the reasons. We have the most progressive tax system in OECD. This strongly discourages wealth creation and earning well. I absolutely despise Jim Ratcliff and James Dyson, but they are all good examples. We could take less from them and keep them here, but tax regime prompted them to move, so we have nothing at all. Labor made this even worse. So it's only mid- high earners who are less mobile are left to squeeze to feed ever growing welfare monster.

High earners are by definition more productive. They generate more output.

Re: “the secret sauce of how to increase that has evaded successive governments for many, many years.”

They have many clues. The alignment between Regan & Thatcher created a race to the bottom for the NYLon financial centres as each deregulated to match the other. The UK needed something the US couldn’t match. Then we got new Labour which was a pro-business centrist party. Unlike the USA which had ideological issues with some investors Labour was very relaxed about Russian & Chinese money which was good for the UK. Then we had a centrist Conservative govt which was very similar but saw opportunity to further loosen our regulations by leaving the EU (or at least some did). That opportunity was largely lost to a mix of US created financial crash & Covid plus the US creating an exclusion list of undesirable companies which restricted China trade (and then we lost Russian ££ to the Ukraine conflict). The latest Labour govt, theoretically also centrist, has proven extremely weak at financial policy and it’s hard to put a finger on why. Theoretically you’d think they’d just relax on China but they only seem to have made token steps. I sort of think they’re just a bit clueless. The budgets have been very political: not very trustworthy numbers. But saying no govt has an idea what to do is wrong. Even this one knows full well they need to put an extra 1% on base income tax but they bottled it to appease the left of the party. Ultimately to no end as that same group will undoubtedly kill off Starmer as soon as it can.

But the Thatcher and Reagan era "race to the bottom" in terms of regulations and your later point " That opportunity was largely lost to a mix of US created financial crash" are linked to each other. The reason the US had a financial crash, and the reason the UK was so exposed to it is a direct result of the loosening of regulations. In the short term those regulations can boost growth but, as you say, it's a race to the bottom and you pay for it further down the line when it all goes to shit.

Russian money also has a downside. Being the basket that dirty money goes after it's laundered brings some income but it also massively pushes up house prices for example (and led to newspapers etc being bought up). Catering to the most wealthy is always going to be risky because the most wealthy can and do move their money around so you then get the problem that you can't tax the super rich more or they will leave and that will crash the economy. But we already built a lot of the economy around keeping the super rich happy at the expense of the local population. So the argument is you can't tax them more or regulate them more but even if you don't, they still leave in the end because somewhere can always offer better.

Also Brexit brought less regulations but that was more than offset by the costs of leaving the EU/the cost of trade. I think sacrificing small and medium businesses (who lost on free trade with the EU) for the benefits of large finance companies (who theoretically win on less regulations) was a bad decision. Especially when even the large finance companies/banking firms lose in other ways from not being part of the EU. If I want somewhere with less regulations and less tax but didn't care about being in the EU then Dubai will always win over London. So we lost in every way possible.

No-one consulted the UK population on whether or not they wanted us to compete to be a playground for billionaires to park their money or if they wanted to sacrifice public services to bail out banks who were under regulated. Part of the popularity of parties like Reform/the Greens is a result of that fallout.

I’m not defending all these actions. I’m just replying to the idea that govts don’t have ideas about what to do about growth. My own personal ideas are more along creating long term pro investment policies and coherent national strategic priorities. It’s galling to me that we have the same population as S Korea yet seem incapable of growing companies on the scale of a Samsung or LG. Every great UK company gets taken out too soon and the number listed on the FTSE shrinks and shrinks.

We're in a hole. Debt interest is over £100 billion a year.

We need to reduce waste (e.g. carbon capture, net zero, new nuclear power plants, HS2, digital IDs), cut welfare spending, reduce entitlements (e.g. massively tighten PIP, reduce the generosity of UC, etc), prevent people that are a net drain from emigrating to Britain, abolish all the anti growth quangos, end the pensions triple lock, leave/repeal the various human rights legislation that results in endless appeals and huge taxpayer funded legal fees, repeal the Town & Country Planning Act to allow building on the Green Belt. The list is seemingly endless.

The money saved should at least balance the budgets, but hopefully be enough to run a surplus that can be used to cut corporation tax and fund a flat rate of income tax without leaving those on lower incomes worse off.

That should attract businesses and skilled people to the UK, which will boost gdp and increase tax revenues. Government debt interest rates should reduce as the debt doom loop resolves itself, which will free up more money for further tax cuts and infrastructure spending. Major investment in high spec, modern pre-fabricated housing would provide both decent factory jobs and millions of new social housing units to reduce the benefits bill further.

But too many people believe in a world of fairies and unicorns and 'taxing the rich'.

Thats partly because they wind up being bought up by American companies though. I would love for a UK government to have a strategy that encouraged businesses especially ICT businesses to grow to be larger enterprises. We are very good at innovating and developing new ideas. But that innovation almost always crosses the Atlantic when it starts to become profitable. Part of that is a legacy of WW2 and the Anglo-American loan agreement of 1946. (A lot of technology went over as payment for the debt, and there was also effectively an agreement to kibosh the UKs emerging computing industry.) But it's also just that America is a bigger country with more money so can always outcompete smaller businesses or buy them up. That's free trade/open markets. It encourages economic growth but also means bigger countries can snap up your businesses.

Ironically, if you wanted to encourage UK growth in the IT sector you would need government intervention. Either investment (comes from taxes) or regulation. For example regulation stating that strategically important services should be provided by UK based technology companies. That would give a competitive edge they just don't have at the moment. Europe is pursuing a strategy like that now (digital sovereignty) but that's more a reaction to America no longer being trusted than only about economic growth. Korea is close to China and Japan geographically. Neither of which it trusts. So of course they were more protective of their ICT industry than the UK was with the US. It wasn't just about growth for them either.

The problem with the London stock market is companies don't reach the same pricing as they do on the US stock markets. Whether that means that the UK is undervaluing or the US overvaluing is open for debate.... I know Rachel Reeves gets a lot of stick, some deserved, but she did try to address this issue. The problem is, if you are politically and culturally tied to the US they are never going to make that easy. Hence every time the EU or UK try to introduce legislation that disadvantages US companies you see a huge criticism of the EU/UK being authoritarian blah blah (sometimes that criticism is justified but that's hot why Vance etc are making it).

So either they try to fix those issue and face a potentially hugely damaging political storm. Or we limp on as we are.

Here we go:
FT.com:
Nearly 6,000 entrepreneurs quit UK in past two years, say wealth managers

"Nearly 6,000 owners of high-growth businesses left the UK over the past two years following changes to Britain’s tax regime and concerns over economic competitiveness, research has found.
Wealth manager Rathbones found that, of business owners to have left the UK, the greatest proportion work in the technology sector. It analysed filings to Companies House between January 2024 and 2026."

That exact sector which could save the economy...

"The UK saw a net outflow of 16,500 millionaires last year, equating to $91.8bn in investable wealth, while jurisdictions such as the US and UAE experienced corresponding inflows, the wealth manager added. "

They generate more GDP but it doesn't necessariy follow that they are more productive in real termsat all! It is simply a flaw in the GDP system.
Was Michelle Mone (or whoever) earning multi millions from suppying defective protective equipment terribly productive? How about a construction firm that builds multiple, defective homes that make them lots of £££ (especially for the CEO!). which later need to be torn down terribly productive? No, they just increase GDP. How about a carer on a low wage, caring for your grandmother and another 5 residents, on their feet all day in a care home all day compared to someone in IT who gets paid a six figure salary but only need to do a couple of hours of work a day, working from home.

Michelle Mone and the PPE is a perfect example of cronyism and it's due to the government rushing contracts in a time of national emergency. They now need to repay the government (and rightly so). Her previous businesses were successful, the PPE thing was wrong and she should rightfully be made to pay back whatever she got from the government contract.

I believe the building firm was made to self fund the rebuilding costs.

Carers do a honourable and decent job.

Some of what you say makes sense but overall it seems rather 'fairies and unicorns' too.
It does seem clear that some cuts to the UK budget need to be made but the cuts to eg pensions and welfare spending (and probably NHS entitlement) would need to be radical to actually reduce the deficit. At present, these radical cuts wouldn't just be politically unpopular but impossible; remember the WFA cut! I think it would take a major crisis for any government to be able to force any meaningful cuts through. Unfortunately, decades of social problems and high inequality and corporations pushing junk food and tech (with gov encouragement) and falling access to NHS services have created an unhealthy, unhappy population so reducing help to the poor would likely worsen most of that, may not be more productive and may well worse social problems.

I like your point about reducing corporation taxes but that would need to be selective. The flat rate of tax is essentially making the poor/middle even poorer. On top of the cut of support, that would simply impoverish more people so the 'hopefully' is doing a lot of heavy lifting here!
I like your point about creating more, rapid social housing to give people some security.
It's sad that we live in a world where the idea of taxing the very rich has become 'fairies and unicorns'. The level of inequality nowdays is extremely destructive.

it does seem clear that some cuts to the UK budget need to be made but the cuts to eg pensions and welfare spending (and probably NHS entitlement)

What would that look like? And who would take the impact?

As a pensioner, I don't like the outlook, but I think it is going to be forced on us. Nobody is going to vote for it, but I am certain that anyone receiving any state benefit is in for a 35% haircut within the next three years.

I think we need to eventually slowly transition away from the state pension to everyone privately saving up for one

Yes but very very slowly. Because retired people voting for cuts to Universal credit/in work benefits/child benefit** will also happily vote for people retiring in 30 years time not to get pensions. But would never vote for cuts that affect them because they earned it.

**Despite the fact they grew up in a welfare state paid for with the very high taxation of the generations above them.

Had the idea where people get a lump say back of whatever NI they contributed or "paid into". Obviously will need to be thought out vrr carefully

People who have paid National Insurance for decades, especially those with maximum contributions quite reasonably see the State Pension as something they have earned.

Whilst there isn’t an individual pot, today’s workers fund today’s pensioners, there is a widely understood social contract: contributions over a number of years build entitlement - 10 years min, 35 year Max - many people pay in for much longer. They even offer the opportunity to make AVC's to offset any shortfall. The government’s own website explicitly states that eligibility depends on your National Insurance record, requiring qualifying years to receive any State Pension.

Everyone! I was responding to the PP's post about lots of cuts being needed.